USDT (Tether)
The largest stablecoin by market capitalization, pegged 1:1 to the US dollar and issued by Tether Limited. USDT is the most widely traded cryptocurrency by daily volume and the dominant quote currency on exchanges globally, particularly in Asia. Tether's reserves include US Treasuries, cash, and other investments, though its reserve composition has faced scrutiny and regulatory settlements.
“USDT is the most commonly used stablecoin on centralized exchanges. The BTC/USDT trading pair on Binance consistently has the highest trading volume in all of crypto.”
Stablecoin
A cryptocurrency designed to maintain a stable value relative to a reference asset, typically the US dollar. Stablecoins provide a way to hold value and transact in crypto without exposure to price volatility. The three main types are: fiat-backed (USDC, USDT — backed by dollar reserves), crypto-backed (DAI — overcollateralized with crypto), and algorithmic (maintaining peg through algorithmic supply mechanisms).
USDC (USD Coin)
A fully-reserved, fiat-backed stablecoin pegged 1:1 to the US dollar, issued by Circle and originally co-founded with Coinbase. Each USDC token is backed by US dollars held in segregated bank accounts and short-term US Treasuries, with reserves attested monthly by an independent accounting firm. USDC is one of the most trusted stablecoins in DeFi and is available on multiple blockchains.
Trading Pair
A combination of two assets that can be traded against each other on an exchange, denoted as BASE/QUOTE (e.g., BTC/USDT). The base currency is the asset being bought or sold, and the quote currency is the unit of measurement for the price. Trading pairs define what assets you can directly exchange without intermediary conversions.